What are potential solutions to closing this funding gap and restoring service levels?

One solution would be for a weighted majority of property owners in Benefit Zone 3 to support increasing their L&L assessments to close the gaps between expenditures and assessment revenues. Increased assessment funding would be used to restore the cutbacks in service levels and put these benefit zones on a more sustainable financial path to maintain existing and new parks. The other solution would be to create “overlay assessments” for smaller areas within Benefit Zone 3 focused around specific parks. These assessments would only benefit these parks.

The funding sources upon which CSD relies to maintain the 10 parks, trails and streetscapes in this part of Elk Grove – known as “Benefit Zone 3” – is insufficient to cover increasing costs for water and services. This budget shortfall could not be closed with the use of reserve funds as it has been since 2009. As a result, CSD had to reduce staffing hours and contractor services effective July 1, 2018 to save approximately $129,000, almost enough to close the funding gap. The balance of the FY 2018-19 deficit ($79,362) will be covered by reserve funds.

Although funds are available for park construction for the development of three new parks, CSD cannot move forward with construction until assessments increase to provide an adequate source of funding for ongoing maintenance.

Landscape and Lighting (L&L) assessments paid by property owners are the predominant source of funding to maintain parks, including replacement of equipment, restroom cleaning, tree service and sport court resurfacing. These assessments are collected in 12 “benefit zones” throughout the District. There are also four “overlay zones” in which smaller segments of property owners within one of the 12 benefit zones have voted to pay an additional assessment to fund maintenance at park facilities within their immediate neighborhood.

Each benefit zone has a unique assessment based on the special benefit provided by its landscape amenities. The annual assessment in Benefit Zone 3 for FY 2018-19 is about $132.25 per Equivalent Dwelling Unit (EDU).

Under California law, assessments may not be increased by an amount greater than the annual Consumer Price Index adjustment without the approval of a weighted majority vote of property owners in that benefit zone. This process is conducted by mail, and each property owner's vote is weighted based on the total amount of the assessment on that owner's property. Without support at the 50 percent + 1 threshold, service level reductions need to be implemented, and development of new parks will be indefinitely postponed in an effort to maintain a balanced budget.

Assessments are used to fund activities within each benefit zone, such as the salaries of Park Operations staff, services such as landscape maintenance, restroom cleaning and tree service, and a small portion of administration overhead. In zones that are adequately funding, projects such as replanting, sport court resurfacing and furniture replacement are also funded. Well-funded zones also set funds aside for future asset replacement such as playgrounds and shade structures.

Funding challenges in Benefit Zone 3 is not new. In 2009, property owners were given an opportunity to approve higher assessments to offset funding shortages for maintaining parks. They overwhelming rejected the proposed assessment increase. In November 2017, CSD conducted a survey among owners of all single-family, multi-family and commercial properties in Benefit Zone 3 to determine whether they would support an assessment increase. Because the survey results were well below the minimum threshold needed for approval, CSD decided to not proceed with a vote.

Residents surrounding Jordan Family Park passed an additional assessment of $194.91 in 2009 when the initial funding shortfall was identified. As such, Benefit Zone 15 – Vista Creek, was created to maintain the park at a normal level. We call these additional assessments “overlay zones” and they supplement the original benefit assessment.

Not at this time. Eleven of the 12 benefit zones are currently funded at sufficient levels to pay for watering, maintenance, equipment replacement and other services. In Benefit Zone 3, low assessment rates were established about 20 years ago but have not been increased since 1997, except for adjustments tied to the CPI (0.50–2.5 percent in past five years).

There is a funding shortfall in Benefit Zone 6, but because the shortfall in Benefit Zone 6 is less severe, service level reductions have been less drastic than those currently being experienced in Benefit Zone 3.

The insufficient funding in Benefit Zones 3 and 6 does, however, have an impact on district-wide facilities, such as Elk Grove Park and Bartholomew Sports Parks. Because all benefit zones contribute to the maintenance of these district-wide facilities, improvement and revitalization projects are limited at these facilities because Benefit Zones 3 and 6 cannot afford to pay their portion.

The basketball hoop at Amundson Park was damaged by vandals and had to be removed. Unfortunately there are no funds for asset replacement. As assets become unsafe, staff will remove equipment, and it will not be replaced until additional revenue is recognized.

One solution would be for a weighted majority of property owners in Benefit Zone 3 to support increasing their L&L assessments to close the gaps between expenditures and assessment revenues. Increased assessment funding would be used to restore the cutbacks in service levels and put these benefit zones on a more sustainable financial path to maintain existing and new parks. The other solution would be to create “overlay assessments” for smaller areas within Benefit Zone 3 focused around specific parks. These assessments would only benefit these parks.

The CSD has been successful at increasing assessments in other Benefit Zones when residents ban together to form a community champion group to help educate fellow neighbors about park funding, and the current lack of funding. The CSD will work with these community champion groups on educational material, and community meetings. Once there appears to be enough community support, staff can present the information to the Board. The desired outcome would be a successful ballot vote.